Could Bride’s Family Invoke Contractual Force Majeure Clause to Obtain Refund of Deposit For Wedding Band?
Adam Greenberg d/b/a Around Town Entertainment sued Alyssa Gallagher, John Gallagher, and Diane Gallagher for breach of contract for their failure to comply with the cancellation provisions in their contract for the services of a wedding band. The court held a trial. Greenberg, represented by counsel, testified and also called Alyssa Gallagher on its case. The Gallaghers, representing themselves, presented the testimony of John and Diane Gallagher, Alyssa’s parents.
Greenberg sought a money judgment in the amount of $8,043.75 and attorneys’ fees. The Gallaghers counterclaimed for $900 in attorneys’ fees.
The parties stipulated into evidence 10 exhibits, as follows, and introduced as plaintiff’s exhibit: (1) emails between the parties; (2) the contract; (3) a “Quickbooks” screenshot of the recipients of the contract; (4) proof of a “Zelle” payment of the contract deposit; (5) emails between the parties; (6) further emails; (7) a press release from the Office of the Governor of the State of Connecticut dated September 24, 2020; (8) a default notice by plaintiff’s counsel; (9) a copy of the wedding venue’s contract; and (10) emails between the wedding venue and Alyssa and Diane Gallagher.
On his case-in-chief, Greenberg testified that he executed a contract dated October 7, 2020, with Alyssa Gallagher for his band of musicians to perform at her wedding on September 17, 2021, at a wedding venue in Connecticut called the Lawn Club Fine Catering. The total contract price for the services contemplated was $10,725.00. Pursuant to the contract, 25% of the contract price was due at the time of execution. There was no dispute that an electronic bank transfer payment, via “Zelle,” in the amount of $2,681.25, which represented 25% of the contract price was timely paid by Diane Gallagher.
Greenberg testified that, at some point in March 2021, the Gallaghers informed him that they were looking to either postpone or cancel the wedding. Greenberg responded by informing them of their obligations under the contract.
Pursuant to the “Cancellation Terms” in the contract, when a cancellation takes places before 90 days of the wedding date, 50% of the contract balance is due immediately–the “settlement amount”– which in turn released Greenberg to re-book the contracted date. Upon a re-booking by a third-party, the cancelling client would receive the settlement amount back, but not the initial deposit. The same paragraph further provided: “Should client fail to pay the 50% due balance (the settlement amount) within 7 days, the contract will remain instated, any cancellation will be deemed unsettled and client will be obligated to the full remaining balance which will be immediately payable and due regardless of the date of cancellation.”
Greenberg further referred to the emails that communicated his offers to resolve any refund or re-booking. He emailed John and Diane Gallagher and explained that, outside of the contract, he could provide additional resolutions: (1) Greenberg could provide a band on another date during a weeknight in peak months, or a Friday or Sunday in off-peak months for a full credit; or (2) upon payment of the settlement amount, and if a third-party rebooked the original wedding date, Greenberg would return the settlement amount and the deposit, despite not having an obligation to do so under the contract. Those offers were rejected and no further payments were made.
On cross examination, Greeenberg testified about the force majeure clause in the contract. The relevant portion of the force majeure clause, crafted after the onset of the Covid-19 pandemic, provides:
In the event of. . . .[a] pandemic, Covid-19 or any unforeseen reason pertaining to force majeure, should Around Town Entertainment be unable to fulfill their obligation of performing on the date or the client cannot have the event for any of the same above force majeure reasons only, then client will have option to select a new date to commence within 12 months. . . . Should there be any postponement and/or cancellation of the above new date, the client will still be fully obligated to all contract payments and client agrees to make all payments as scheduled for 2021. . . . In case of another postponement or any cancellation, client is not guaranteed a Saturday and will still be fully obligated to the contract even if a Saturday option is not available. Client cannot cancel contract for any reason including but not limited to force majeure, frustration of purpose/inability to perform or financial hardship. Client understands and agrees to no refunds for any reason even in the case of force majeure.
Greenberg testified he understood that the Gallaghers cancelled when he did not receive any further payment. Stated that communication ended between the parties when both sides invoked that their attorneys would handle any future claim. And testified that the force majeure clause did not apply, in any event, because there was no force majeure event.
Greenberg also called Alyssa Gallagher who testified that she signed the contract on her own free will and understood that the document was legally binding. And stated that prior to cancelling the contract she wanted to explore rescheduling the wedding but, ultimately, opted to have a smaller affair, in Mexico, with no reception.
John and Diane Gallagher testified on their case-in-chief. John testified that their family was precluded from the wedding event they wanted because the State of Connecticut only permitted 100 people in attendance at an indoor wedding venue as of September 2020, and the Gallaghers’ contract negotiated with the Lawn Club guaranteed 110 guests. The Gallaghers wanted 186 guests, but expected that only 130 people could attend. Given that the wedding would exceed the rules promulgated by the State of Connecticut, Gallagher testified that they could not go forward with the wedding.
Diane Gallagher testified that at some point it became clear that the groom’s family, who lived out of the country could not travel to the United States for the wedding, due to restrictions on travel caused by the Covid-19 pandemic. Therefore, she discussed with Greenberg the possibility of cancelling the contract. Testified that Greenberg became irate and “abrasive” and aggressively demanded further payments or threatened litigation. She further testified that the parties discussed holding an event during a weekday in an off-peak month. After the conversations, Gallagher testified that she was “overwhelmed” and “bullied.” On cross examination, she testified that after the “abrasive” phone call, she no longer wanted to work with Greenberg..
In a breach of contract claim, plaintiff must establish (1) the existence of a contract; (2) the party’s own performance under the contract; (3) the other party’s breach of the contract; and (4) resulting damages. It is the court’s responsibility to examine the contract to determine if it’s language is unambiguous. The court must determine whether the language it uses has a definite and precise meaning, unattended by danger of misconception in the purport of the agreement itself, and concerning which there is no reasonable basis for a difference of opinion. Where there is an unambiguous written agreement, courts must enforce the plain meaning of the agreement by its terms without creating ambiguities not present in the document itself. The best evidence of what parties to a written agreement intended is what they said in their writing. If the agreement on its face is reasonably susceptible of only one meaning, a court is not free to alter the contract to reflect its personal notions of fairness and equity.
And courts should be extremely reluctant to interpret an agreement as impliedly stating something which the parties have neglected to specifically include. So courts may not by construction add or excise terms, nor distort the meaning of those used and thereby make a new contract for the parties under the guise of interpreting the writing.
The court began by considering the existence of a contract. The only parties obligated to the contract were Greenberg and Alyssa Gallagher. John and Diane Gallagher did not sign the contract and thus, were neither parties to, nor bound by, the agreement. As such, John and Diane Gallagher were dismissed from this action.
The contract terms concerning cancellation were clear. It was a non-cancellable, non-refundable contract. In order to receive any deposit back, the contract required that Alyssa pay the settlement amount of 50% of the balance. Once that settlement amount was paid, then Greenberg was bound to return the settlement amount if the date was re-booked. There was no payment of the settlement amount by Alyssa. Therefore, there was no return of the settlement amount and Alyssa was bound to the terms requiring payment. Greenberg’s emails, which were stipulated into evidence, provided that he offered both a return of the settlement amount, if paid, and the deposit, if he could re-book the date. The court credited the emails, which were undisputed and concluded that it could not be said that Greenberg unduly acted in bad faith.
The Gallaghers raised the application of the force majeure clause as a reason to cancel the contract. Courts have interpreted force majeure clauses according to their function of relieving a party from its obligations when expectations are unfulfilled due to an extreme or unforeseeable event beyond the parties’ control and occurring by no fault or negligence of the parties themselves. A force majeure clause must be interpreted as to limit damages where the reasonable expectations of the parties and the performance of the contract have been frustrated by purposes beyond their control
Lower courts in New York State had reiterated the purpose of contractual force majeure clauses during New York State’s ban on large events by Executive Order. Force majeure clauses excuse non-performance only where the reasonable expectations of the parties have been frustrated due to circumstances beyond the control of the parties. Only where the force majeure clause specifically included the event that actually prevented a party’s performance will that party be excused.
Here, the force majeure clause was contemplated during the Covid-19 pandemic. The contract was executed on October 7, 2020. The clause itself indicated that should a force majeure event related to the pandemic occur, then the parties might postpone the event and select a new date within 12 months. There was some testimony about the Gallaghers attempting to secure a new date. The dates offered were off-peak weekday options, which the Gallaghers not find satisfactory. But the selection of a new date was not due to a force majeure event.
Both parties presented a press release from the Office of the Governor of the State of Connecticut dated September 24, 2020. The release announced that, as of October 8, 2020, Connecticut will “move towards Phase 3 Reopening” which included raising the limitation of guests at indoor social and recreational guests from 25 guests to 100 guests.” But the contract was executed on October 7, 2020, during a unique moment in history when limitations on guests at indoor events was highly foreseeable. The force majeure clause applied only where the reasonable expectations of the parties are frustrated. The fact that the Gallaghers sought more guests than permitted by the State of Connecticut did not trigger the force majeure clause under the circumstances.
The court credited the testimony of Diane Gallagher, who testified that in March 2021, she became aware that the groom’s family could not obtain visas to travel to the United States from their home country for the wedding. The inability of those guests to be present prompted the Gallaghers to cancel. That basis for cancellation also failed to trigger the force majeure clause. The force majeure clause was triggered where there was an impossibility for the band to play at a wedding. The unavailability of certain guests did not preclude the band’s performance, nor did it preclude the event from taking place. While that might seem unduly strict, to find otherwise would be an impermissibly broad expansion of the terms of the force majeure clause.
The facts in this case were different than those in a suit in Civil Court, Queeens County, upon which the Gallaghers relied. In that proceeding, the enforcement of a force majeure clause permitted reimbursement of amounts paid by a client to a wedding venue when the wedding was prohibited by the Executive Orders of the State of New York. In the Queens case, the contract was executed in 2018, prior to the existence of the Covid-19 pandemic. The force majeure clause read that the agreement could be terminated, and all funds returned, upon a “government regulation” that made holding a wedding “illegal, impractical, or impossible to provide or use the Venue’s facilities”. The clients there exercised the force majeure clause in May 2020. Around the same time, the Governor of New York issued various Executive Orders that outright prohibited large gatherings or events. The Queens County court explained that “from March 7 through May 28, 2020, the prohibitions of nonessential gatherings became stricter and repeatedly extended,” indicating that holding the wedding would be in contravention of the Executive Orders or impossible, and thus, the application of the force majeure clause was appropriate.
The Greenberg-Gallagher dispute was on different footing. The force majeure clause here referenced the Covid-19 pandemic, and therefore, the restrictions on indoor gatherings, availability of overseas guests, and travel arrangements were foreseeable. Of more import, however, was that the circumstances for the cancellation were not impossibility of performance.
The Gallaghers also raised that Greenberg failed to mitigate his damages by not re-booking the date. In support of that argument Diane Gallagher testified that she asked a friend to call Greenberg and try to secure the band on the same wedding date —September 17, 2021– but her friend did not hear back from Greenberg. While that was testimony is in essence hearsay, even if credited, it did not demonstrate a failure to mitigate.
A plaintiff’s right of recovery is subject to reduction insofar as defendant can show that: (1) plaintiff failed to make reasonably diligent efforts to mitigate their damages; and (2) the extent to which such efforts would have diminished the loss. The Gallaghers neither produced any competent evidence indicating that Greenberg failed to mitigate hiss losses nor the amount at which the losses would have been diminished. Moreover, Greenberg credibly testified on his case-in-chief that he did not suspend marketing for his band for that time, and further that, had a booking appeared for that date, he would have taken it. As such, there was no reduction in dasmages here based on a lack of mitigation.
Regarding claims for attorneys’ fees and expenses, it is well established that attorneys’ fees and disbursements are incidents of litigation and the prevailing party may not collect them from the losing party unless an award is authorized by agreement between the parties or by statute or court rule.
The contract terms here explicitly provided, under the heading “cancellation terms”, that “[f]ailure to pay balance according to the terms of this agreement will make client liable for all court costs and reasonable attorney fees.” Greenberg sought attorneys’ fees and provided an statement of account indicating a bill of over $18,000.00 in costs and fees. As the prevailing party here, Greenberg was/is entitled to reasonable attorneys’ fees. The court would hold a hearing to determine the reasonable amount.
Thr Gallaghers’ counterclaims for attorneys’ fees were dismissed as to John and Diane Gallagher because, even though they were dismissed from the action, they failed to provide any proof of fees and were self-represented. Fees were not awarded to Alyssa Gallagher as she was not the prevailing party, failed to provide any proof of fees, and was also self-represented.
Greenberg was awarded $8,043.75, with interest as of April 28, 2021, and costs as against Gallagher only. Greenberg’s claims as against John Gallagher and Diane Gallagher were dismissed. The Gallaghers’ counterclaims for attorneys’ fees were dismissed. And Greenberg’s claim for attorneys’ fees we set down for a hearing.